IMF Executive Board approves $1 bln disbursement to Ukraine

IMF Executive Board approves $1 bln disbursement to Ukraine

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Ukrinform
The International Monetary Fund has officially confirmed the allocation of next $1 billion tranche to Ukraine and has determined the direction of further efforts of the Ukrainian side to extend the Extended Fund Facility (EFF) program.

This is said in the IMF's official statement released on Monday.

“The Executive Board of the International Monetary Fund (IMF) today completed the third review of Ukraine’s economic program under the Extended Fund Facility (EFF). The completion of this review enables the disbursement of SDR 734.05 million (about US$1.00 billion), which would bring total disbursements under the arrangement to SDR 6,178.26 million (about US$8.38 billion),” the statement reads.

Following the Executive Board’s discussion, Mr. David Lipton, First Deputy Managing Director and Acting Chair, noted that the Ukrainian economy was showing welcome signs of recovery.

“Growth is returning, inflation has been brought down, and international reserves have doubled. This progress owes much to the authorities’ decisive policy actions, including sound macroeconomic policies. The recent stabilization provides a promising basis for further growth,” Mr. Lipton said.

The IMF First Deputy Managing Director also mentioned that to achieve faster, sustainable growth, needed to lift incomes and enable Ukraine to catch up with its regional peers, structural reforms to improve the business environment and attract investment need to be accelerated. “A start needs to be made with privatization and developing a market for agricultural land. Corruption needs to be tackled decisively. Despite the creation of new anticorruption institutions, concrete results have yet to be achieved,” Mr. Lipton underscored.

In addition, Mr. Lipton drew attention to high public debt of Ukraine, which remained notwithstanding the large fiscal adjustment. In this context, he called for urgent conduct of structural fiscal reforms to ensure medium-term sustainability. “Ukraine cannot afford to delay comprehensive pension reform much longer, including by raising the effective retirement age. Sustained efforts are also needed to improve revenue administration and advance public administration reform,” the IMF representative added.

Mr. Lipton also highlighted the importance of safeguarding the NBU’s independence and remaining focused on containing inflation and rebuilding international reserves within a flexible exchange rate regime.

“Impressive progress has been made in rehabilitating the banking system, but efforts need to continue to restore banks’ soundness and reinforce their ability to support growth,” he said, welcoming the nationalization of Ukraine’s PrivatBank.  

Mr. David Lipton also called on Ukraine to continue its good-faith efforts to resolve the remaining sovereign arrears.

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